MGMT 640 Final Exam Questions and Correct Answers (Graded A+) | Latest 2026/2027 Update | Guaranteed Pass.

MGMT 640 Final Exam Questions and Correct Answers (Graded A+) | Latest 2026/2027 Update | Guaranteed Pass. 1) Management accounting plays a role in A planning new products. B evaluating operational processes. C controlling costs. D all of the above. 2) Management accounting, managers are more concerned with receiving information that is: A completely objective and verifiable. B completely accurate and precise. C relevant, flexible, and immediately available. D relevant, completely accurate, and precise. 3) Which one of the following costs should NOT be considered a direct cost of serving a particular customer who orders a customized personal computer by phone directly from the manufacturer? A the cost of the hard disk drive installed in the computer. B the cost of shipping the computer to the customer. C the cost of leasing a machine on a monthly basis that automatically tests hard disk drives before they are installed in computers. D the cost of packaging the computer for shipment. A, B and D are direct costs. 4) At its present level of operations, a small manufacturing firm has total variable costs equal to 65% of sales and total fixed costs equal to 20% of sales. If sales change by $1.00, operating income will change by A $0.15 B $0.35 C $0.65 D An answer can't be determined from this information. Workings: Let us assume sales as $100; then variable costs are $65 and fixed costs are $20. The EBIT would be: $100 - $65 - $20  $15 Now, let us assume a % increase in Sales by 1%, ie., $101. Variable costs would then be $65.65 and fixed costs $20.20. EBIT = $101 - $65.65 - $20.20  $15.15 Increase in EBIT = $15.15 - $15  $0.15 5) ACME company has the following production costs for May: units produced 2,000 Direct Material $20,000 Direct Labor 4,000 hrs @ $15 per hour Supplies $5,000 Rent $2,000 Depreciation $3,000 Supervision $8,000 In June they plan to produce 3,000 units. What is their production cost per unit for May and total production costs for June? A $49; $140,500 B $49; $147,000 C $43; $86,000 D $43; $129,000 Total production cost per unit for May = ($20,000 + (4000x15) + $5000 + $2000 + $3000 + $8000)/2000 units  $49 per unit For June: Direct materials: $20,000/2000 x 3000  $30,000 Direct labor: $60,000/2000 x 3000  $90,000 Supplies: $5,000/2000 x 3000  $7,500 Rent (fixed)  $2,000 Depreciation (fixed)  $3,000 Supervision (fixed)  $8,000 Total costs for June  $140,500 8. Which of the following is not usually a responsibility of the controller? A. preparing budgets and performance reports B. filing tax returns C. managing cash and marketable securities D. providing information for management decisions 9. A company purchases machinery costing $50,000 in October of 2006. Five years later they discover a better, more efficient machine they could purchase to replace the existing machine. The new machine costs $90,000 and the company has determined that they would be able to sell the original machine for $30,000. In making the decision about buying the new machine, how much are total sunk costs? A. $60,000 B. $40,000 C. $50,000 D. $10,000 This is because the old machine cost of $50,000 has already been incurred and cannot be reversed. 11. The Contribution margin ratio is found by: A. Subtracting total fixed costs from sales and dividing this by the number of units produced. B. Adding total variable costs and fixed costs and dividing by the selling price per unit C. Taking the selling price per unit and subtracting variable costs from it and dividing by the selling price per unit. D. Dividing total fixed and variable costs by the selling price per unit. E. B & C only. 6. The goal of managerial accounting is to provide information that managers need for A. planning. B. control. C. decision making. D. All of the above answers are correct. 7. Shareef’s Window Company is in the process of preparing a production cost budget for August. Actual costs in July for 120 windows were: Materials cost $ 4,800 Labor cost 3,000 Rent 1,500 Depreciation 2,500 Other fixed costs 3,200 Total $15,000 The company is currently producing and selling 144 windows annually and each window is sold for $140.00. The company is considering lowering the price to $125.00 for which management estimates this will increase sales to 200 windows. Materials and labor are the only variable costs. Under what situation should the company lower the price of its windows? A. If total revenue exceeds totals costs under the new pricing B. If incremental revenue exceeds the old revenue C. If incremental profit is a positive number D. If incremental costs decrease 10. Mixed costs are the same as: A. Semivariable costs B. Step costs C. Total production costs D. Discretionary fixed costs E. A & C only This is because mixed costs contain both fixed and variable portions and can be called as semivariable costs.